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Tesco launched the price-cutting
initiative in September claiming it would provide 'immediate help at the
checkout' for customers.

Bosses promised a change in philosophy to
'charge as little as we can, rather than as much as we can get away
with'.

However, subsequent research
questioned the value of the cuts with evidence that the price of many
products rose shortly before the scheme was introduced.

WHILE HIGH STREET STRUGGLES, LUXURY BRAND BUCKS THE TREND

Luxury handbag designer Mulberry looked unaffected by the financial crisis today as it trebled its half-year profits through strong sales at home and abroad.

The group, which has 86 stores and concessions worldwide, including 44 in the UK, posted a 44 per cent increase in like-for-like retail sales in the six months to September as customers snapped up the autumn/winter collection.

John Cummins, analyst at Altium Securities, said there was more growth ahead as Mulberry was 'only just scratching the surface' in many luxury goods markets outside the UK.

The high-end label intends to open nine stores in the second half of 2012, after recording pre-tax profits of £15.6million, up from £4.7million in 2010, as total revenues rose 62 per cent to £72.3million.

Studies published this week suggest 40 per cent of shoppers simply do not trust supermarket price-cut claims.

Tesco sells a large number of pricier
items, such as furniture and electrical goods, for which sales across
the high street have suffered in recent months.

The company is paying
for price cuts on 3,000 items by reducing the number of multi-buy
promotions, scrapping its double Clubcard points reward offer and
squeezing suppliers.

Chief executive Philip Clarke said:
'Times are tough for a number of our customers at home and in a number
of our international markets.

'The UK economy is fragile, unemployment's at a 15-year peak, so we're facing into tough times.'

The company, which has 2,700 UK
stores, described the impact of its Big Price Drop as 'promising'.

It
said the fall in income resulting from lower prices had been wiped out
because it was selling more food.